How an Amazon Seller can optimise selling in Europe through inventory management
Many brands struggle to optimise their sales in one country, let alone in the top 5 countries in Europe that Amazon sells in; UK, Germany, France, Italy & Spain. However, this is exactly what we did for a leading toy brand, by growing their best selling product to #1 in all 5 EU Countries! All it took was an innovative approach to inventory management.
When we first took over this account, our client was selling on Amazon as a Vendor. However, they were struggling to meet Amazon’s high demand for inventory and kept missing their delivery window. This led to them receiving heavy chargebacks and also losing any SEO ranking they had made on Amazon. This made it almost impossible for their products to ever reach best-seller status because they never had enough inventory to optimise their sales.
Controlling their inventory
To ensure that our brand could manage their stock we changed them from a Vendor to an Amazon Seller, allowing them to participate in Amazon’s Pan-European FBA programme. The Pan-EU programme allows Amazon Sellers to fulfil orders in all European marketplaces easier and at lower FBA rates, removing cross-border fees. This way the client had full control over their inventory management and how much demand there was without struggling to meet Amazon’s strict deadlines. However, this was only part of the challenge to ensure our client could sell successfully on Amazon.
Thinking outside the box
The distribution service would provide an easy solution to the brand shipping throughout Europe. Plus, FBA would provide them with Prime eligibility without our client having to invest in Seller Fulfilled Prime, a service that wasn’t logistically plausible for our client. However, we were aware of the drawbacks of FBA which would be caused by the size of their products. We wanted to ensure that they didn’t rack up heavy storage fees which would ultimately affect their overall sales. Instead, we needed to create a middle ground and find a solution that worked both for our client and for our team. We decided that to avoid Amazon’s storage fees, we could arrange for the bulk of their stock to be held in a 3P warehouse in Germany. The warehouse had a lower overall cost so could be used as storage while our team of highly skilled account managers could arrange to send units from it into Amazon’s fulfilment centre. This way the Seller could still use Amazon’s FBA service to distribute to customers, but had an extra level of security to ensure that surprise Amazon fees didn’t prove too high and affect how much inventory they held with Amazon. With the logistics in place, our team was able to build a bespoke forecast for the toy manufacturer to ensure they had the relevant stock over the summer (their key period) and optimise the sales they would have been missing out on due to inventory management issues.
This strategy is one that must be constantly monitored. There is a fine balance between ensuring that Amazon doesn’t hold too much inventory and increasing the storage fees, but that it also doesn’t hold too little that stock sells out too quickly! With our account managers gate-keeping how much storage is kept between Amazon and the 3P warehouse at all times, our client can rest in the knowledge that they will receive the lowest Amazon storage fees for the largest inventory stock. Within 5 months of taking over all aspects of their Amazon Seller Central Account and creating a sales forecast for our client, they achieved a top 5 seller ranking and saw their monthly Amazon sales increase by over 900%! By creating an Amazon strategy which optimised pricing in relation to shipment and fulfilment fees, our team optimised Seller sales and got their hero product to #1 Best Seller status across all European marketplaces.
Choose Molzi to sort out all your logistics needs
Selling on Amazon is not a static job, it requires a lot of hard work and constant supervision, especially in relation to inventory management. Sometimes, selling on a marketplace requires outside the box thinking. At Molzi, we take it upon ourselves to create a logistics programme that optimises sales but most importantly works for our clients. Unsure of how we can help your brand? Take a peak at our other case studies to get an idea. Or equally, contact us now for a quote!